Questrade versus Firstrade and Robinhood for Canadian and US citizens - compare commissions, investing fees, trading tools, account pros and cons. Which online broker is better?

Overview

Questrade is a low cost Canadian brokerage firm and it is available ONLY to Canadian citizens and legal residents. Firstrade and Robinhood are United States brokerage firms and are NOT avialable to Canadians.

Questrade Promotion

Get $50 in free trades with new Questrade account.

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Firstrade $0 Commissions

Firstrade is charging $0 to buy and sell stocks, ETF's, mutual funds and options. That's right - there are NO broker commissions at this firm. There is no fine print or intro period to worry about. Learn more in Firstrade Review.

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$0 commissions + up to $200 in transfer fee rebates.

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Robinhood Overview

Robinhood is a fairly new brokerage firm that offers a new style of investing, with a very different commission schedule. Some investors have understandably expressed concern over its safety and reliability. Here are the details on this important topic:

Is FDIC Insurance Available at Robinhood?

Robinhood is a brokerage firm, not a bank. Thus, FDIC insurance is not available through Robinhood. Some brokers today are able to offer FDIC protection on cash balances by partnering with FDIC-insured banks. Robinhood does not have these partnerships, so any deposits or investments with the brokerage firm carry zero FDIC protection.

What About SIPC Safeguards?

Although FDIC insurance is absent at Robinhood, the brokerage firm is a member of SIPC, which is the primary insurer for the brokerage world. Every securities account at Robinhood is protected up to $500,000. Half of this amount can be used to cover cash.

SIPC does not currently protect cryptocurrencies, and thus any bitcoin or Ethereum investments you make through Robinhood Crypto are uninsured.

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Does Robinhood Offer Supplemental Insurance?

Some brokerage firms offer extra insurance above and beyond SIPC and FDIC. Vanguard, for example, offers supplemental protection from Lloyd’s of London and London Company Insurers. The policy protects each account up to a maximum of $49.5 million, with a cash limit of $1.75 million. There’s a total brokerage house limit of $250 million. Unfortunately, Robinhood has not taken out this type of policy; so SIPC is the only insurance the brokerage firm offers.

What Other Protections Are in Place?

Besides membership in SIPC, Robinhood also is registered with the Securities and Exchange Commission, the investment regularity body in the United States. Robinhood must comply with the same rules and laws as other broker-dealers in the United States.

Robinhood is also a member of FINRA, a self-regulatory investment body that oversees the conduct of American brokerage firms.

What Technical Protections Does Robinhood Offer?

There are several software and technical protections in place at Robinhood to guard brokerage accounts. For example, account passwords are hashed with the BCrypt hashing algorithm, which means they’re not stored in plaintext. Furthermore, the broker-dealer stores sensitive information such as social security numbers in encrypted form.

Details of external bank accounts aren’t stored at all. They are used one time to authenticate ownership of the account.

Robinhood also uses pin codes, Touch ID, and Face ID to let users log into mobile apps. Two-factor authentication can also be used with a text message or an authenticator app.

Open Robinhood Account


Open Robinhood Account


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